Who can stop gas pains? 

Don't look to Washington. Instead, check the face in the
rear-view mirror

by William R. Moomaw
May 13, 2001
Reprinted from the Boston Sunday Globe

It was bad enough to learn last week that the average Boston driver spends 42 hours per year stuck in traffic. This makes Boston the 12th most traffic-congested city in America, which finally put the Big Dig city ahead of the Big Apple in something. But to be paying $1.70 and up per gallon to suffer such an indignity was just too much.

US gas prices in the past two weeks reached an all-time high, not adjusting for inflation. Never mind that Europeans are still paying twice that price (most of it in taxes), or that some ''experts'' are predicting prices might reach $3 .00 a gallon before it is over.

America hired an oilman to be its leader, oilmen to be its top two leaders, but now the White House says there is nothing President George W. Bush can do about gas prices. ''If any politician has a magic wand that they can wave over gas prices to lower them, the president ... would like to listen to them,'' a presidential aide said Monday.'

What is going on? Why, for example, does a gallon of gas cost 27 cents more today than five weeks ago? Those looking to explain it all are taking a cue from the oil shocks of the 1970s and dusting off the old arguments: It is OPEC, the Organization of Petroleum Exporting Countries. It is the oil companies, deliberately withholding gasoline to make prices rise, just like the utilities are doing with electricity in California; the tankers are sitting off New Jersey, and will appear when the price is high enough. Oil companies are making huge, obscene profits. Unfortunately, none of these convenient explanations fits the facts.

The world price of oil is moderately high, about where it has been for the past year, at $28 per barrel. OPEC is letting oil flow pretty freely. There are tankers coming from Europe filled with refined gasoline, and they are unloading at docks up and down the East Coast. Oil companies are making big profits now, just as they took losses three years ago when world prices sagged to $10 per barrel.

The precipitating cause for the recent price surge is tight supply caused by rapid growth in demand. Gasoline refineries today are operating at more than 95 percent of capacity, when only last year some sat idle. No new refineries have been built in 20 years; yet, they now produce more than twice as much gasoline as they did in 1983.

However, adding 16 million inefficient new vehicles to the US fleet each year has finally overwhelmed the system. Americans must simply look in the mirror to find the price-rise culprit.

Yes, price is the result of supply and of demand, and prices rise when demand exceeds supply. Bush loves to point out that this is what markets are all about - and American consumers love markets, too, as long as those markets are driving gasoline prices down, as they did to record lows of 80 cents a gallon in 1998. When prices rise, however, consumers call for federal policy, in the form of price constraints.

Al Gore was foolish enough to respond to this siren call by convincing President Clinton to leak a small amount of oil from the Strategic Petroleum Reserve to dampen prices and, he hoped, get himself elected president.

The Bush-Cheney team, in the energy policy that is to be unveiled Thursday, proposes to increase supply by drilling for more oil. But more oil is available only in relatively small amounts in environmentally fragile places such as the Arctic National Wildlife Refuge in Alaska, protected areas in the Rocky Mountains, or off the beaches of Florida and California. The plan would also reportedly relax clean air standards and refinery siting rules. Such policies threaten America's environmental security as much as high energy prices threaten its economic security.

Drilling in these sites still leaves the question of how America will meet growing demand after these new sources are drained. Americans have already explored and drilled just about everywhere in this great nation, except under the T-ball field on the White House lawn.

Oil production from the rich fields of the continental United States peaked more than 30 years ago, and the great oil finds in northern Alaska only delayed the day that American production failed to meet more than half of domestic demand.

Indeed, American oil reserves amount to only a few percent of global totals, while nearly two-thirds lies in the volatile Middle East. Oil imports are now needed to cover nearly 60 percent of US demand.

This heavy reliance on oil imports raises acute questions of national security. The bombings of the USS Cole in Yemen, of the US embassies in Kenya and Tanzania, and of the New York Trade Tower were not random acts of violence. They occurred in part because while slaking its thirst for oil, America thrusts itself forcefully into a part of the world that is hostile to American power, values, and culture.

Despite denials from the president's father, the Gulf War was about supporting the American way of oil consumption. The current administration is carrying on the tradition; conservation is not a big part of its agenda.

Vice President Dick Cheney has explicitly opposed the idea of doing more with less, and last week White House spokesman Ari Fleischer put it succinctly: Using less energy, he said, is incompatible with ''an American way of life, and it should be the goal of policy makers to protect the American way of life. The American way of life is a blessed one. And we have a bounty of resources in this country.''

It is indeed uncomfortable for Americans to realize that it is their gas-guzzling habits that are responsible for so much violence hurled in our direction.

While consumers have no control over supply, which is in the hands of the oil companies and foreign lands, they do have control over demand. Reducing demand will lower prices, but what can one do to reduce demand?

The answer seems, in the big world of global policy debate, oddly small, even personal. It is also not new. If we could simply return to the buying habits of 10 years ago - when more people chose new cars for their gas-efficiency rather than outsized status symbolism - the price of gas would not be an issue today.

Look in the mirror and ask yourself, honestly, if you really need a 15-mile-per-gallon SUV or van. There are, after all, SUVs that get better than the average of 20 miles per gallon, and regular cars that get over 40.

There is also help from new technology. The new hybrid-electric vehicles from Toyota and Honda get over 40 and 60 miles per gallon, respectively. These cars represent the future and are here now. Ford and other US manufacturers will have this technology in the showroom in two years.

Replacing inefficient vehicles takes a while, but in the meantime it is possible to drive less. Share a ride with a colleague to work, or take public transit. Join the 25 percent of Boston commuters who do not drive to work. Go shopping with a neighbor - together in one vehicle; ride-sharing just one day per week reduces commuter gas use by one-fifth. Sell one or two cars and become a one-vehicle family. Rent a van or other specialty vehicle when it is really needed rather than drive an inefficient truck around to carry a single person to the grocery store. Join one of Boston's new car-sharing programs such as Zip-Car.

The advantage of demand-side management of gasoline prices is that you control it rather than having it control you. Increasing supply simply makes the United States more vulnerable to hostile forces and makes you sit more hours each year in traffic and dirty air. The benefits of reducing demand are not only lower prices, less congestion, and cleaner air, but also greater environmental, economic, and national security. You choose.

As gas prices continue upward - and even the White House alluded Monday to the possibility of $3-a-gallon gas - taking control of demand puts you in the real driver's seat.


Professor William R. Moomaw directs the International Environment and Resource Policy Program at the Fletcher School of Law and Diplomacy, Tufts University